255 F.3d 1256 | 10th Cir. | 2001
Lead Opinion
Johnnie Sullivan was convicted following a jury trial on three counts of willful failure to file a tax return, in violation of 26 U.S.C. § 7203. He was sentenced on all
BACKGROUND
Mr. Sullivan was the owner and operator of Sullivan’s Rat Hole Drilling, a sole proprietorship that drilled holes for oil excavation. Mr. Sullivan stipulated that Sullivan’s Rat Hole Drilling earned gross receipts of $606,000 in 1991, $564,765 in 1992, and $517,253 in 1993. He failed to file tax returns for the years 1991, 1992 and 1993. The jury convicted him on all three counts of willful failure to file.
The district court used the November 1, 1998, edition of the sentencing guidelines to calculate Mr. Sullivan’s sentence. Pursuant to U.S.S.G. § 3D1.2(d), the three counts were grouped and the initial base offense level was calculated by reference to the total aggregate amount of loss.
DISCUSSION
Mr. Sullivan concedes that, because his trial counsel did not object to the application of the November 1, 1998, guidelines to his sentence, we review his sentence under the guidelines only for plain error. See United States v. Gilkey, 118 F.3d 702, 704 (10th Cir.1997); Fed.R.Crim.P. 52(b). The plain error standard applies when an ex post facto claim is not raised at sentencing. See United States v. Massey, 48 F.3d 1560, 1568 (10th Cir.1995). “To constitute plain error, the error must have been both ‘obvious and substantial.... An error is substantial if it seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.’ ” United States v. Gerber, 24 F.3d 93, 95 (10th Cir.1994) (quoting United States v. Brown, 996 F.2d 1049,
I. Ex Post Facto Argument
The sentencing guidelines applicable to tax offenses were amended effective November 1, 1993. The amendment increased the base offense level for failure to file convictions. Mr. Sullivan was convicted of failing to file tax returns on April 15, 1992, April 15, 1993, and April 15, 1994. Thus, two of the counts related to conduct occurring before the guidelines amendment and one count related to conduct occurring after the amendment. His total offense level under the pre-amendment guidelines was 15. Under the post-amendment guidelines, it was 19.
The Sentencing Guidelines contain the “one-book rule”: “The Guidelines Manual in effect on a particular date shall be applied in its entirety. The court shall not apply, for example, one guideline section from one edition of the Guidelines Manual and another guideline section from a different edition of the Guidelines Manual.” U.S.S.G. § 1B1.11(b)(2), p.s. We, like virtually every other circuit, have approved use of the one-book rule. See United States v. Nelson, 36 F.3d 1001, 1004 (10th Cir.1994). The Guidelines also state that, in general, a sentencing court must apply the guidelines in effect at the time of sentencing, see U.S.S.G. § 1B1.11(a), p.s., unless such application would violate the ex post facto clause. See U.S.S.G. § 1B1.11(b)d), p.s.; see also United States v. Svacina, 137 F.3d 1179, 1186 (10th Cir.1998). “The Ex Post Facto Clause is violated if the court applies a guideline to an event occurring before its enactment, and the application of that guideline disadvantages the defendant ‘by altering the definition of criminal conduct or increasing the punishment for the crime.’ ” Id. (quoting Lynce v. Mathis, 519 U.S. 433, 441, 117 S.Ct. 891, 137 L.Ed.2d 63 (1997)).
Additionally, in 1993, the Sentencing Commission issued a policy statement making explicit that the one-book rule applies to situations involving multiple counts: “[i]f the defendant is convicted of two offenses, the first committed before, and the second after, a revised edition of the Guidelines Manual became effective, the revised edition of the Guidelines Manual is to be applied to both offenses.” U.S.S.G. § 1B1.11(b)(3), p.s. The commentary to that provision states that the revised edition is to be applied “even if the revised edition results in an increased penalty for the first offense.” U.S.S.G. § 1B1.11(b)(3), comment. (backg’d.).
Because the defendant completed the second offense after the amendment to the guidelines took effect, the ex post facto clause does not prevent determining the sentence for that count based on the amended guidelines. For example, if a defendant pleads guilty to a single count of embezzlement that occurred after the most recent edition of the Guidelines Manual became effective, the guideline range applicable in sentencing will encompass any relevant conduct (e.g., related embezzlement offenses that may have occurred prior to the effective date of the guideline amendments) for*1260 the offense of conviction. The same would be true for a defendant convicted of two counts of embezzlement, one committed before the amendments were enacted, and the second after. In this example, the ex post facto clause would not bar application of the amended guideline to the first conviction; a contrary conclusion would mean that such defendant was subject to a lower guideline range than if convicted only of the second offense.
Id. Mr. Sullivan argues that the application of the November 1, 1998, guidelines to all three counts, consistent with § 1B1.11(b)(3), violates the ex post facto clause. Both parties agree that application of the amended guidelines to Mr. Sullivan's pre-amendment conduct (the first two counts of conviction), or to all three counts, disadvantaged Mr. Sullivan by subjecting him to a higher sentencing range.
As both parties acknowledge, circuit courts are divided on the question of whether sentences consistent with § 1B1.11(b)(3) violate the ex post facto clause. In our first opinion in this case, we held that Mr. Sullivan’s sentence pursuant to § 1B1.11(b)(3) did violate the ex post facto clause, because we viewed the punishment for Mr. Sullivan’s first two tax violations as having been retroactively increased by a guideline enacted after he committed those violations. By contrast, the government argues that Mr. Sullivan’s sentence is more like a sentence enhancement which utilizes prior convictions to increase punishment for a crime, or more like a sentence for a continuing offense which spans a guideline amendment. There is no dispute that these latter situations involve no ex post facto problem. The question in this case is whether Mr. Sullivan’s case is more like the simple retroactive increase in punishment for a crime, or more like a sentencing enhancement or sentence for a continuing offense spanning an amendment. After careful consideration, we conclude that Mr. Sullivan’s sentence is more like the latter situations and does not violate the ex post facto clause.
In so holding, we are in agreement with six other circuits, which have either expressly upheld the validity of § 1B1.11(b)(3) against ex post facto challenges or have approved and applied the basic concept underlying that section. In United States v. Cooper, 35 F.3d 1248 (8th Cir.), vacated, 514 U.S. 1094, 115 S.Ct. 1820, 131 L.Ed.2d 742 (1995), reinstated, 63 F.3d 761 (8th Cir.1995), cert. denied, 517 U.S. 1158, 116 S.Ct. 1548, 134 L.Ed.2d 650 (1996), the defendant was convicted of various firearms violations, some occurring prior to 1991 amendments increasing the applicable base offense levels, and some occurring after those amendments.
*1261 At the time [defendant] elected to commit the third firearms violation he was : clearly on notice of the 1991 amendments to the Sentencing Guidelines and the fact that they increased the offense levels for the firearm crimes in question and required the aggregation of firearms in counts I, II, and IV. In our view, [defendant] had fair warning that commission of the January 23, 1992 firearm crime was governed by the 1991 amendments that provided for increased offense levels and new grouping rules that considered the aggregate amount of harm.
Id. The court thus concluded that “it was not the amendments to the Sentencing Guidelines that disadvantaged [defendant], it was his election to continue his criminal activity after the 1991 amendments became effective.” Id. Further, the court observed that it is well established that the completion date of a conspiracy determines which version of the guidelines applies, and “a " “common scheme or plan” by an individual and the “same course of conduct” by an individual are the unilateral equivalents to the continuing group offense of conspiracy.’ ” Id. at 1251 (quoting United States v. Reetz, 18 F.3d 595, 598 (8th Cir.1994)).
The court therefore held that the amended version of the guidelines applied to all counts, including those relating to conduct occurring prior to the amendments. “To hold otherwise could lead to the anomalous result that a particular defendant could be subject to a lower sentence if convicted of multiple offenses spanning a revision of the Sentencing Guidelines, than if convicted of the singular last offense after the revision of the Sentencing Guidelines.” Id. at 1252.
The Eleventh Circuit subsequently agreed with the Eighth Circuit, following essentially the same reasoning:
[T]he one book rule, together with the Guidelines grouping rules and relevant conduct, provide that related offenses committed in a series will be sentenced together under the Sentencing Guidelines Manual in effect at the end of the series. Thus, a defendant knows, when he continues to commit related crimes, that he risks sentencing for all of his offenses under the latest, amended Sentencing Guidelines Manual. Analogous to a continuous criminal offense, like conspiracy, the one book rule provides notice that otherwise discrete criminal acts will be sentenced together under the Guidelines in effect at the time of the last of those acts.
United States v. Bailey, 123 F.3d 1381, 1404-05 (11th Cir.1997). The court concluded that “[defendant] had fair notice that continuing his crimes in operating his firearms business subjected him" to the amended Sentencing Guidelines in effect when he committed the last of the crimes for which he was convicted.” Id. at 1407. Accord, United States v. Lewis, 235 F.3d 215, 218 (4th Cir.2000) (“We conclude that the guidelines provision of which Lewis complains, U.S.S.G. § 1B1.11(b)(3), does not violate the Ex Post Facto Clause.”), petition for cert. filed, 69 U.S.L.W. 3702 (Apr. 17, 2001) (No. 00-1605); United States v. Kimler, 167 F.3d 889, 893 (5th Cir.1999) (“[W]here a sentencing court groups offenses committed before a change in the sentencing guidelines with offenses after the amendment, and then applies the amended guideline in determining a defendant’s appropriate sentence, the Ex Post Facto Clause is not implicated.”); United States v. Vivit, 214 F.3d 908, 919 (7th Cir.) (holding that the guidelines “provide notice to criminals that engaging in ongoing fraudulent behavior involving the same type of harm risks grouping of convictions, which because' of the one-book rule, will all be sentenced according to the
In a district court case involving virtually the identical tax violation as this case (willful failure to file tax returns for the years 1990 through 1994) and the identical ex post facto argument arising from sentencing the defendant under the post 1993 guideline amendments, the court found no ex post facto problem. United States v. Tucker, 982 F.Supp. 1309 (N.D.Ill.1997). After examining the various circuit court decisions written to date, the Tucker court concluded:
The Court finds the reasoning of the First, Eighth, and Eleventh Circuits more persuasive than that of the Ninth Circuit. The Court respectfully declines to follow Ortland because it fails to address the resulting anomaly recognized by the Commission and so clearly exhibited by the facts of this case: if the tax losses are divided into two groups as Defendant and the Ninth Circuit suggest, his sentencing range for all counts would be lower than the sentencing range that would be imposed had Defendant only pled and been sentenced to the last two counts. Under the Ortland analysis, Defendant would be subject to a sentencing range of ten to sixteen months for all five counts. Had Defendant only pled and been sentenced to the last two counts, he would be subject to a sentencing range of twelve to eighteen months because the 1990 through 1992 losses would be considered relevant conduct. This Court does not expect that the Seventh Circuit would agree with an analysis that results in less time for more crime.
Id. at 1317.
Only two circuits have held that § 1B1.11(b)(3) presents an ex post facto problem. See United States v. Ortland, 109 F.3d 539, 546 (9th Cir.1997) (holding that the application of § 1B1.11(b)(3) to sentence defendant under amended guideline for all five counts of conviction, four of which occurred prior to guideline amendment, violated the ex post facto clause); United States v. Bertoli, 40 F.3d 1384, 1404 (3d Cir.1994) (“The fact that various counts of an indictment are grouped cannot override ex post facto concerns.”). Accord, United States v. Johnson, Nos. 97-CR-206, 98-CR-160, 1999 WL 395381 (N.D.N.Y. June 4, 1999), aff'd, United States v. Johnson, 221 F.3d 83 (2d Cir. 2000).
We agree with the reasoning of the Eighth, Eleventh, Fifth, Seventh, First and Fourth Circuits and conclude that the application of guidelines policy statement § 1B1.11(b)(3) to all of Mr. Sullivan’s willful failure to file tax counts does not violate the ex post facto clause. As indicated above, the central concern of the ex post facto clause is fair notice to a defendant that the punishment for a crime has been increased from what it was when the crime was committed. Mr. Sullivan was on notice even when he committed his first two tax offenses that the Sentencing Guidelines would determine his base offense level from the total tax loss occurring from all years in which he failed to pay taxes. Moreover, the grouping rules and the rele
We further agree with the Eighth and Eleventh Circuits that, while failure to file a tax return is not a continuing offense even if committed in successive years, a series of such failures to file is the “same course of conduct” under the guidelines. The “same course of conduct” is analogous to a continuing offense like conspiracy, the ending date of which determines the applicable sentencing guidelines. Finally, like those courts, we are also persuaded by the Commission’s recognition of the anomaly that could result if we applied the preamendment guidelines to all of Mr. Sullivan’s counts of conviction: he “could be subject to a lower sentence if convicted of multiple offenses spanning a revision of the Sentencing Guidelines, than if convicted of the singular last offense after the revision of the Sentencing Guidelines.” Cooper, 35 F.3d at 1252. We therefore conclude that the application of § lBl.ll(b)(3) to sentence Mr. Sullivan for all counts under the amended guidelines did not violate the ex post facto clause.
II. Calculation of Loss
U.S.S.G. § 2Tl.l(c)(2) governs the calculation of tax loss for the willful failure to file a tax return. It provides in part:
(2) If the offense involved failure to file a tax return, the tax loss is the amount of the tax that the taxpayer owed and did not pay.
Note: If the offense involved failure to file a tax return, the tax loss shall be treated as equal to 20% of the gross income ... less any tax withheld or otherwise paid, unless a more accurate determination of the tax loss can be made.
The commentary to § 2T1.1 states that the “presumption” of § 2Tl.l(c)(2) is “to be used unless the government or defense provides sufficient information for a more accurate assessment of the tax loss.” U.S.S.G. § 2T1.1, comment, (n.l). That commentary further recognizes that there may be situations where the tax loss “may not be reasonably ascertainable.” Id. “[Although the government bears the burden at sentencing of proving the amount of tax loss flowing from the defendant’s illegal acts, neither the government nor the court has an obligation to calculate the tax loss with certainty or precision.” Spencer, 178 F.3d at 1368 (citations omitted).
At trial, the government and Mr. Sullivan entered into a stipulation that Sullivan’s Rat Hole Drilling had the following gross business receipts: $606,000 in 1991, $564,765 in 1992 and $517,253 in 1993. They also stipulated that the business paid the following expenses: $424,200 in 1991,
In the presentence report, the probation officer determined that the tax loss was $337,603: “[p]ursuant to U.S.S.G. § 2Tl.l(e)(2), the tax loss for the years 1991 through 1993 is 20% of [Mr. Sullivan’s] $1,688,017.20 gross income or $337,603.44.” PSR at 7, R. Vol. 8. Mr. Sullivan objected to the PSR’s use of the 20% figure because it “failed to include allowable trade and business deductions.” Addendum to PSR (Objections) at i, R. Vol. 8. The probation officer responded that the PSR’s tax loss figure should be used because “the defendant has failed to demonstrate that the tax loss information in the Presentence Report is inaccurate.” Id. atii.
At sentencing, the government introduced as an exhibit the gross income figure to which the parties stipulated at trial. Mr. Sullivan objected that it “shows only gross income.” Tr. of Sentencing at 32, R. Vol. 7. The government’s response was as follows:
As far as the deductions, again I will state that the guidelines say very clearly that you take 20 percent of the gross income unless you’ve got better figures. The defendant destroyed his records. The defendant would not provide information as far as his deductions. And although the Government has records of what expenses were and those records were turned over to the defense, there’s been no attempt in the last four months to sit down and — everything was intermingled — personal expenses, business expenses — as to what was paid for how, what was paid for in cash. There’s simply no way of determining that with any degree of accuracy.
And therefore, the Court is forced to fall back on the flat 20 percent figure, which is probably not a perfect number but it is the best we can do in this case and that’s because of the defendant’s lack of cooperation.
Id. at 40. After hearing argument from both sides on the issue, the court held it would follow the 20% figure, using the stipulated gross income figures: “[A]t this point I don’t believe the Court has before it information that assures the Court that a more accurate determination of the tax loss can be made ... in this matter. Certainly I don’t have the materials before me that would lead to that nor is there any present ability to arrive at that kind of calculation.” Id. at 50.
We affirm the district court’s use of the 20% figure. The guidelines state that the tax loss in a failure to file offense is 20% of the gross income “unless a more accurate determination of the tax loss can be made.” U.S.S.G. § 2Tl.l(c)(2) (emphasis added). After listening to arguments and reviewing exhibits and proposed exhibits on the matter, the court found that it could not determine a more accurate tax loss figure. Bearing in mind that we review the court’s factual findings for clear error, and that we must give “ ‘due deference’ to the district court’s application of the guidelines to the facts,” Spencer, 178 F.3d at 1367 (quoting United States v. Henry, 164 F.3d 1304, 1310 (10th Cir.), cert. denied, 527 U.S. 1029, 119 S.Ct. 2381, 144 L.Ed.2d 784 (1999)), we perceive no clear error in the district court’s computation of tax loss.
III. Effect of Apprendi
In Apprendi, the Supreme Court held that “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s sentence for Mr. Sullivan. No. 00-8012, United States v. Johnnie C. Sullivan.
. Section 3Dl.l(a) provides for the grouping of "Closely Related Counts” as specified in § 3D 1.2. Section 3D 1.2, in turn, provides that "[a]ll counts involving substantially the same harm shall be grouped together into a single Group.” Among such counts "involving substantially the same harm” are counts where the "offense level is determined largely on the basis of the total amount of harm or loss.” Offenses encompassed by § 2T1.1, willful failure to file tax returns, are specifically included as counts which must be grouped.
. "[Commentary in the Guidelines Manual that interprets or explains a guideline is authoritative unless it violates the Constitution or a federal statute, or is inconsistent with, or a plainly erroneous reading of, that guideline.’ Stinson v. United States, 508 U.S. 36, 38, 113 S.Ct. 1913, 123 L.Ed.2d 598 (1993).
. The effective date of § IB 1.11 (b)(3) was November 1, 1993, after the defendant in Cooper was sentenced but before the Eighth Circuit issued its opinion on appeal. Thus, Cooper is one of the cases which did not expressly apply § IB 1.11(b)(3), but it sentenced the defendant in a manner completely consistent with that section.
. The district court correctly predicted that the Seventh Circuit would not follow the Ort-land analysis. See Vivit, 214 F.3d at 919.
. In the commentary to the relevant conduct provisions of the guidelines, the Commission’s discussion of "same course of conduct” includes the following example: "a defendant’s failure to file tax returns in three consecutive years appropriately would be considered as part of the same course of conduct because such returns are only required at yearly intervals.” U.S.S.G. § IB 1.3, comment. (n.9(B)).
Dissenting Opinion
dissenting.
Given that neither the facts nor the law have changed, I respectfully dissent from the opinion on rehearing. The initial panel opinion correctly held that application of post 1993 amendment guidelines to the two counts occurring before that amendment violates the ex post facto clause. United States v. Sullivan, 242 F.3d 1248, 1254 (10th Cir.2001); accord United States v. Bertoli, 40 F.3d 1384, 1404 (3rd Cir.1994). Despite the Sentencing Commission’s approval of this practice in U.S.S.G. § 1B1.11(b)(3), we are dealing with three discrete failure-to-file counts where guilt was determined by a jury on each count, rather than a sentencing enhancement on a post-amendment count or a sentence for a continuing offense spanning an amendment.
The ex post facto clause prohibits application of a law that increases the punishment for an offense after that offense has been committed. Rogers v. Tennessee, — U.S. —, ——, 121 S.Ct. 1693, 1697, 149 L.Ed.2d 697 (2001). The ex post facto clause is concerned with notice and governmental restraint-increasing the punishment for an offense beyond what was available when the crime was committed does not comport with either value. Lynce v. Mathis, 519 U.S. 433, 441, 117 S.Ct. 891, 137 L.Ed.2d 63 (1997). Here, application of the amended guideline to pre-amendment offenses satisfies both requirements of an ex post facto prohibition: it is both retrospective-it applies to failure-to-file offenses occurring before its enactment-and it disadvantages Mr. Sullivan by increasing the punishment for those pre-amendment offenses. See id.
The court determines that Mr. Sullivan had sufficient notice to avoid ex post facto concerns because he would be deemed to know that (1) his sentence would be determined based upon the guidelines in effect at sentencing, 18 U.S.C. § 3553(a)(4)(A); U.S.S.G. § lBl.ll(a); (2) any sentence would be based upon total tax loss, U.S.S.G. §§ 2T1.2, 2T4.1 (Tax Table) (Nov. 1992) (pre-amendment); and (3) offenses stemming from similar conduct will be grouped, U.S.S.G. §§ 3D1.1 & 3D1.2, or
Of course, the only notice this provides at the time of commission of the first two, pre-amendment offenses is that the sentence could be determined in accordance with guideline provisions that may or may not be amended. Even if the notice is sufficient to inform a defendant that the last offense could determine the sentence, only a defendant with the prescience of a clairvoyant could anticipate an actual sentence based upon a yet-to-be amended guideline.
This plainly is not sufficient notice under Miller v. Florida, 482 U.S. 423, 107 S.Ct. 2446, 96 L.Ed.2d 351 (1987). Miller involved post-offense amendments to state sentencing guidelines that raised a defendant’s presumptive sentence to 5.5 to 7 years, from 3.5 to 4.5 years. The trial court applied the guidelines in effect at sentencing and imposed a 7-year sentence. The Supreme Court determined that application of the amended guidelines to the defendant violated the ex post facto clause. Id. at 435-36, 107 S.Ct. 2446. In rejecting the state’s argument that the guidelines scheme provided fair notice that it might be amended, the Court stated:
Here ... the statute in effect at the time petitioner acted did not warn him that Florida prescribed a 5lh -to 7-year presumptive sentence for that crime. Petitioner simply was warned of the obvious fact that the sentencing guidelines law-like any other law-was subject to revision. The constitutional prohibition against ex post facto laws cannot be avoided merely by adding to a law notice that it might be changed.
Id. at 431, 107 S.Ct. 2446. Likewise, in this case, the pre-amendment guidelines simply did not provide adequate, quantitative notice of the post-amendment penalty associated with the pre-amendment counts.
Because of this problem, it is necessary to view the penalty as originating from the third, post-amendment offense, as enhanced by the first two, pre-amendment offenses. But for the ex post facto problem, such an artificial construction (which ignores that Mr. Sullivan was convicted by a jury of three discrete counts and sentenced on each count) would be unnecessary. See United States v. Ortland, 109 F.3d 539, 547 (9th Cir.1997).
Finally, the notion that Mr. Sullivan might be under-punished were the pre-amendment guidelines applied to all three offenses is misplaced. The narrowly tailored solution to the ex post facto problem, applying the pre-amendment guideline to the two pre-amendment offenses, and the post-amendment guideline to the post-amendment offenses, obviates the notion that he will receive a windfall not mandated by ex post facto concerns. Sullivan, 242 F.3d at 1254.